Netflix, Inc. is slated to issue its fourth quarter earnings report on Tuesday following the closing bell. Analysts expect the company to report a growth of 1.62 million in its US-based subscribers for the period. This shows a significant decline from the same period last year, during which the video streaming giant had 4.33 million new subscribers.
In the previous quarter, Netflix missed analysts’ expectations of 1.15 million new customers, reporting only an additional of 880,000 subscribers. On the other hand, analysts expect the company to record 3.50 million new subscribers worldwide due to launches in new countries such as Spain, Portugal, and Italy.
The company’s expansions and investments come at the expense of its profits. Analysts expect Netflix to post an income of $9.60 million for the quarter, well below last year’s $83.37 million. However, Netflix is expected to report a total revenue of $1.80 billion, up by 22.90 percent year-over-year.
Currently, Netflix has a market cap of $44.47 billion and a price to earnings (P/E) ratio of 276.70. It has a 12-month high of $133.27 and a 12-month low of $47.71. The company holds a 50-day moving average price of $118.46 and a 200-day moving average price of $110.72.
Several research firms evaluated the company’s stock performance.
Wedbush gave it a rating of ‘underperform’ and a targetprice of $40. Piper Jaffray gave it a rating of ‘hold’ and a target price of $109. Barclays gave it a rating of ‘equal weight’ and a target price of $115. Zacks Investment Research gave it a rating of ‘buy’ and a target price of $119. Canaccord Genuity gave it a rating of ‘buy’ and a target price of $120.39. Rosenblatt Securities gave it a rating of ‘buy’ and a target price of $125. Vetr gave it a rating of ‘strong buy’ and a target price of $125.96. Goldman Sachs gave it a rating of ‘buy’ and a target price of $140. Drexel Hamilton gave it a rating of ‘buy’ and a target price of $150. Credit Suisse gave it a rating of ‘hold’. Cantor Fitzgerald and Guggenheim gave it a rating of ‘buy’. RBC Capital Markets gave it a rating of ‘outperform’. Citigroup, Inc. gave it a target price of $121. Robert W. Baird gave it a target price of $128.
Netflix holds an average rating of ‘buy’ and a consensus target price of $120.98.
The company has constantly been initiating efforts to improve its content by producing its original series. Furthermore, Netflix has been benefiting from the ongoing shift from traditional cable TV to subscription video on demand (SVOD).
Netflix is rapidly expanding worldwide, launching its services to over 190 countries to boost its user base. Part of the move, the company is adding more regional languages. Recently, Netflix has added to its roster of available languages Arabic, Chinese (simplified and traditional), and Korean.
By 2016, Netflix seeks to offer about 30 original series (both new and sequels), 30 original kids series, and 24 original feature films and documentaries. The company also plans to bring a few stand-up comedy shows.